This case describes the challenges faced by QualPak management in their effort to have the company survive in the face of low-cost Chinese competition as well as the credit crisis.
QualPak started as a small workshop in the 1960s, making injection molds for plastics products. The company had grown because of its focus on quality and customer relations but has had to slash costs, first in response to foreign competition, and now again due to the global credit crisis. It is also discussed the company efforts at automation to reduce labor costs in conjunction with their efforts to reduce product quality for parts whose assembly was to be automated; use of cheaper raw material that required specialized equipment; use of cheaper machines that may not be acceptable to high quality customers; implementation issues with a lower cost ERP system; and attempts at outsourcing certain components.
The case shows that companies need to make decisions within a systems context where changes in any one sub-system can impact other units of the company, or even its external partners, in complex ways. It also indicates that decisions to reduce the quality of either processes or products must especially be made with great care because even though they are meant to be short-term survival measures, they can also create significant shortterm disruptions along with their long-term implications.
Author: Sema Dube, Manu Dube
Institution: Yeditepe University
Industry: Manufacturing/ Plastic and Metal Packaging of Cosmetics and Household Products
Discipline: Strategy and General Management
Number of pages: 13
Language: English
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